In South Florida it's a Renter's Market. Mortgage Holders Having Many Sleepless Nights
In Palm Beach County, many buyers during the peak have been stuck holding the bag, maintaining sky-high payments on property that's sitting unsold. In the meantime, renters are making out beautifully. To give you guys some examples:
- In Riviera Beach three-bedroom townhomes are renting for as low as $1,150 a month. Owning one would cost about $1,800 to $3,000 a month, after a 20 percent down payment.
- In West Palm Beach, $400,000 townhomes are renting in the $1,500 range. Owning one would cost nearly twice that per month.
- In Lantana, a $450,000 three-bedroom condo with an Intracoastal view is available for $1,850 per month.
- In Port St. Lucie, three-bedroom, $450,000 houses are renting for about $2,200, a third less than they would cost to own.
- In Wellington, $800,000 homes that would cost nearly $6,000 per month to buy are renting for about $3,000.
Terrence McManus, president of Florida RentFinders, said now that the interest-only periods have ended on many investors' mortgages, "they're trying to get income out of their houses any way they can."
McManus said that most of the landlords he works with are renting at a loss.
"None of them is cash-flow positive," he said.
Some agents are advising landlords to slash rents in order to create even a trickle of cash.
"If it takes seven months to rent at $4,000, you're better off getting $2,000 right away."
For the particular article that discusses this trend, many people wouldn't even comment on the renting situation for fear of further eroding the market. From the looks of it, why wouldn't someone rent at this point and just wait it out? Considering that some have gotten a $2M house for $4K a month, why would you want to risk owning in South Florida at this point?
